ECON 490 –

THE ECONOMICS OF

ORGANIZATIONS

First Class Session

Outline of Presentation

• Examples

• The University As An Organization

• The Music Industry - A Selected History

• Course Overview

• Readings

• Course Web Site

• A Bit About Professor Arvan

• Survey (optional and not for credit)

The University As An Organization

Standardized Testing

SAT ACT

Test Prep

Parliament Tutors

Test Prep Guide

Kaplan

In college classes instruction and

assessment are bundled.

Well known universities are brands.

Harvard Stanford

U of I

Instructors are university employees

not independent contractors.

contractor

employee

What issues are resolved by making

instructors employees?

How do students know the instructor will

teach a course of high quality?

Don’t be fleeced

Which arrangement lessens the chance of

bribes for better grades?

Teacher accused

Instructor presentation material is typically

made freely available through the LMS.

Presentation material

Students purchase textbooks on the

market. That expenditure is not in tuition.

bookstore

Students pay the university tuition, which

covers many but not all of the costs

relevant to their college education. They

go to the market for textbooks and

perhaps other supplemental items.

The Music Industry – A Selected History

In The Beginning…..

Elvis

Vinyl – And Player

Record player

Early Portable Listening

Transistor radio

TV Promoted Up And Coming Groups

The Beatles on Ed Sullivan

American Bandstand

Content for Purchase at Record Stores

Record store

Audio Equipment Purchased Separately

Hifi Store

Technical Innovation – Audio Cassettes

Audio cassette

The Grateful Dead

Grateful Dead

Cable Television - MTV

MTV

SONY conquered the portable market.

Walkman

Going Digital - CDs

CDs

Recap Up Till This Point

1980s

Personal Computer and CD-ROM Drive

PCs

Amazon.com launches online bookstore.

Jeff Bezos

Broadband - the standard for connectivity

Broadband

All Hell Breaks Loose – Illegal File Sharing

Napster

Palm Pilots Synced with PC

Palm Pilot Syncing

The Revolutionary Innovation I - iPods

iPods

The Revolutionary Innovation II - iTunes

iTunes

Revolutionary Innovation III – Music Store

iTunes Store

The industry moved to an integration

between content and its delivery. A new

model came into being. Something

similar is happening now with video.

Course Overview

• Theory of the Firm where Econ 302 left off• 302 is sometimes called price theory and the focus is on markets.

• This course focuses on economic transactions that happen inside an organization and that are not price regulated or are only indirectly price regulated.

• Syllabus

• Experimental in Approach• We’ll try some things and see how it goes

• If it goes well we’ll stick with that

• If there are serious issues we’ll try other things

• Last spring some students showed stark senioritis

• Will also stray into current events now and then as the economic crisis suggests ways organizations must evolve

Primary Textbook – Milgrom and Roberts

Milgrom and Roberts

Also Required – Bolman and Deal

Bolman and Deal

ATLAS Moodle Class Site

Moodle

Professor Arvan – Publish or Perish

Lanny Arvan search in Google Scholar

Professor Arvan – Learning Technology

SCALE

CET

CITES Ed Tech

CITES Class Tech

College of Business

Professor Arvan – Office Hours

Start of Semester Survey

Survey